17th November 2020
EP Report

The state-run Titas Gas has a provision shortfall of Tk 736 crore in its pension fund, according to the company's audit report.


Besides, the listed natural gas distribution company did not keep any provision against its fixed deposit receipts (FDRs) with Padma Bank and ICB Islamic Bank, it said.


In its financial statements, Titas Gas showed that it is owed about Tk 168 crore as cumulative penal interest since 2002, which was doubtful to the auditor.


The company also did not comply with an order from the Financial Reporting Council on transferring share money deposits to share money capital.


Against this backdrop, the company's auditor provided a qualified opinion on its financial reports for the year that ended on June 30, 2020.


The information was disclosed recently on the Dhaka Stock Exchange website.


A qualified opinion is a statement issued in an auditor's report that suggests the financial information provided by a company was limited in scope or there was a material issue with regard to the application of generally accepted accounting principles.


The financial statements of Titas Gas showed that the company required a provision for its pension fund for eligible employees.


As per the actuarial valuation, the pension fund amounted to Tk 819.74 crore as of June 30, 2018.


However, the provision for the pension fund was only Tk 30 crore, resulting in a shortfall of about Tk 789 crore, the audit report said. And so, the actuary firm recommended making an annual provision of Tk 188.90 crore for the next five years to make up the said deficit.


In addition, the required provision for the pension fund for the years 2018-19 and 2019-20 has been increased by Tk 59.62 crore and Tk 59.55 crore respectively.


The company also paid Tk 51.58 crore and Tk 49.28 crore respectively as a final settlement for the outgoing employees for the preceding two years.

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